MUNICIPAL BOARD OF ABU ROAD versus JAISHIV & ORS. ETC.

Citation: [1988] 1 S.C.R. 584 · Decided: 27-10-1987 · Supreme Court of India · Bench: RANGANATH MISRA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
MUNICIPAL BOARD OF ABU ROAD 
v. 
JAISHIV & ORS. ETC. 
OCTOBER 27, 1987 
B 
[RANGANATH MISRA AND S. RANGANATHAN JJ.] 
c 
Rajasthan Municipalities Act, 1959-S. 104 Levy of Octroi by 
different municipalities within the State on varying basis and at varying 
rates-Validity of. 
By a notification issued in 1964 under s. 104 of the Rajasthan 
Municipalities Act, 1959, the State Government revised the rate of 
octroi levied on cloth by the municipal board of Abu Road which was 
challenged by a batch of writ petitions. A Single Judge of the High 
Court held that the provisions of s. 104(1) of the Act were valid but the 
notification in respect of the municipal board of Abu Road relating to 
D cloth was bad. During the pendency of the appeals before the Division 
Bench sub-s. (2) of s. 104 was added by s. 12 of the Rajasthan 
Municipalities (Amendment) Act of 1978. The Division Bench over-
looked this amendment and reiterated the reasons of the Single Judge 
and dismissed the appeals. By another notification issued in 1976, the 
State Government revised the levy of octroi on all types of cloth in 
E respect of Sujangarh Municipal Board which was challenged by another 
batch of writ petitions relying on the decision in the Abu municipal 
board cases; but the Single Judge, as also a different Division Bench 
which dealt with the matter did not entertain the challenge in view of 
the amended provision of s. 104 of the Act. These two groups of appeals 
arose from the two batches of writ petitions aforesaid. 
F 
Allowing the appeals preferred by the Municipal Board of Abu 
Road and dismissing the appeals relating to Snjangarh Municipality. 
HELD: There is no dispute as to exigibility of octroi. Every 
municipality under s. 7 of the Rajasthan Municipalities Act, 1959 is a 
G 
body corporate. People residing within each municipal area can be 
classified as one group different from residing in any other municipality 
since octroi is to be levied by the municipality as provided in s. 104(1) 
subject to the control regarding the rates of levy by the State Govern-
ment. The plea of discrimination on the basis of the rates prevalent in 
another municipality cannot be entertained. The scheme in s. 104 takes 
H note of the position that local conditions and needs varied and accord-
584 
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MUNICIPAL BOARD v. JAISHIV [MISRA. J.] 
585 
ingly both in the proviso to sub-s. (1) as also in sub-s. (2) itself, emphasis A 
on that feature has been put. It is thus open to the State Government on 
the basis of local conditions and needs to prescribe different rates in 
relation to different municipalities in the matter of taxes to be levied, 
varying duty of octroi is, therefore, not open to challenge. The Division 
Bench while dealing with the appeals of Abu Road municipality should 
have taken note of the amendment of sub-s. (2) with retrospective 
B 
effect. [588B-E] 
2. In some municipalities the levy is on the value of goods while in 
others it is on the basis of weight. Here again, the State Government 
seems to have applied its mind and has authorised charge of octroi on 
weight basis taking into consideration the special circumstances. ln C 
bigger municipalities where there are wholesale markets particularly of 
cloth. a reduced rate of octroi has been prescribed to encourage larger 
import. In smaller municipalities where the import is for direct con-
sumption the levy is on ad valorem basis at a higher rate. The State 
Government seems to have also taken into consideration that in smaller 
municipalities there is not much demand for costly and fine cloth which D 
have higher prices while the position is otherwise in bigger municipal 
areas. This appears to be the justification for adopting the weight basis 
in respect of larger municipalities and ad valorem basis for the smaller 
municipalities. This seems to be a legitimate basis and we do not think 
any valid objection is available against this differential treatment. 
Law is well settled that if unequals are treated unequally there is no 
E 
discrimination and Art. 14 of the Constitution is not available to be 
invoked. [588E-H] 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 
2255-56 of 1979. 
From the Judgment and Order dated 20.12.1978 of the Rajas-
than High Court in Special Appeal Nos. 40 and 39 of 1968. 
V.M. Tarkunde, Tapas C. Ray, Chandmal Lodha, S.K. Jain, 
Dalveer Bhandari and Badridas Sharma for the appearing parties. 
The Judgment of the Court was delivered by

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